1999 Minnesota Statutes

     67A.231 Deposit of funds; investment; limitations. 

    The directors of any township mutual insurance company may 
 authorize the treasurer to invest any of its funds and 
 accumulations in:  

    (a) Bonds, notes, mortgages, or other obligations 
 guaranteed by the full faith and credit of the United States of 
 America and those for which the credit of the United States is 
 pledged to pay principal, interest or dividends, including 
 United States agency and instrumentality bonds, debentures, or 
 obligations; 

    (b) Bonds, notes, evidence of indebtedness, or other public 
 authority obligations guaranteed by this state; 

    (c) Bonds, notes, evidence of the indebtedness or other 
 obligations guaranteed by the full faith and credit of any 
 county, municipality, school district, or other duly authorized 
 political subdivision of this state; 

    (d) Bonds or other interest bearing obligations, payable 
 from revenues, provided that the bonds or other interest bearing 
 obligations are at the time of purchase rated among the highest 
 four quality categories used by a nationally recognized rating 
 agency for rating the quality of similar bonds or other interest 
 bearing obligations, and are not rated lower by any other such 
 agency; or obligations of a United States agency or 
 instrumentality that have been rated in one of the two highest 
 categories established by the Securities Valuation Office of the 
 National Association of Insurance Commissioners.  A company may 
 not invest more than 20 percent of its admitted assets in the 
 obligations of any one corporation.  This is not applicable to 
 bonds or other interest bearing obligations in default as to 
 principal; 

    (e) Investments in the obligations stated in paragraphs 
 (a), (b), (c), and (d), may be made either directly or in the 
 form of securities of, or other interests in, an investment 
 company registered under the Federal Investment Company Act of 
 1940.  Investment company shares authorized pursuant to this 
 subdivision shall not exceed 20 percent of the company's 
 surplus.  These obligations must be carried at the lower of cost 
 or market on the annual statement filed with the commissioner 
 and adjusted to market on an annual basis; 

    (f) Loans upon improved and unencumbered real property in 
 this state worth at least twice the amount loaned thereon, not 
 including buildings, unless insured by property insurance 
 policies payable to and held by the security holder; 

    (g) Real estate, including land, buildings and fixtures, 
 located in this state and used primarily as home office space 
 for the insurance company; 

    (h) Demand or time deposits or savings accounts in 
 federally insured depositories located in any state to the 
 extent that the deposit or investment is insured by the Federal 
 Deposit Insurance Corporation or the National Credit Union 
 Administration.  An additional deposit not to exceed 50 percent 
 of the township mutual insurance company's policyholder surplus 
 may be located in these depositories if covered by private 
 deposit insurance written by an insurer licensed by the 
 department of commerce; 

    (i) Guarantee fund certificates of a mutual insurer which 
 reinsures the business of the township mutual insurance 
 company.  The commissioner may by rule limit the amount of 
 guarantee fund certificates which the township mutual insurance 
 company may purchase and this limit may be a function of the 
 size of the township mutual insurance company; 

    (j) Up to $1,500 in stock of an insurer which issues 
 directors and officers liability insurance to township mutual 
 insurance company directors and officers; 

    (k) Up to $10,000 in shares of stock of the National 
 Association of Mutual Insurance Companies bank, subject to the 
 commissioner's approval; and 

    (l) Overnight repurchase agreements with the depository 
 that handles the company's primary accounts under paragraph 
 (h).  The repurchase agreements must be collateralized by 
 securities that the company is otherwise authorized to invest in 
 under this section.  The securities must have an aggregate 
 market value of at least 105 percent of the total amount 
 invested under the repurchase agreement. 

    HIST: 1981 c 127 s 1; 1987 c 337 s 112; 1995 c 214 s 16; 1997 
 c 222 s 8; 1998 c 297 s 2; 1999 c 52 s 1